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2023 (5) TMI 717 - HC - VAT and Sales TaxTaxability - sale of old cars - incidental & ancillary to the business of the appellant-assessee and covered under the definition of ‘business” as defined under Section 2 (c) of Punjab VAT Act, 2005 or not - imposition of penalty without proving any mens-rea on the part of the appellant - charging of interest when there is no mens-rea on the part of the appellant and tax has been paid as per returns. Whether the sale of old car and freight received through Transport Union, can be added to the taxable turnover of the assessee? HELD THAT:- In the above said case, it was held that sale of discarded and unserviceable items was intended only for reduction of the space and to save accommodation. The said sale was not integrated with (or connected with) the main business even, if, the same was of considerable volume and frequency. - the amount received from the sale of old cars cannot be included in the taxable income of the assessee. Levy of penalty - demand against wrongly claimed ITC - HELD THAT:- Before the Tribunal, learned counsel for the assessee-appellant had stated that he had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24 and customer-wise summary. In view of the said fact, the appellant was not held entitled to claim ITC on the said items - Once, the assessee had himself admitted his mistake, whether penalty of Rs. 16,02,484/- under Section 56 of the Act can be imposed along with interest of Rs. 5,52,857/-. On this issue, reference can be made to a judgment passed by in COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT], wherein, Hon’ble the Supreme Court was examining a case of imposition of penalty under Section 271 (1) (c) of the Income Tax Act. The assessee had claimed incorrect expenditure in his return. In that case, it was held that Tribunal, as well as, the Commissioner of Income-tax (Appeals) and the High Court have correctly reached this conclusion as where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Ratio of the aforesaid judgment is directly applicable on the facts of the present case. Before the Tribunal, learned counsel for the assessee had conceded that the appellant had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24. The benefit of this ITC was never granted by the revenue. Hence, it was not a case, where wrong information was given. Only a claim was made, which was ultimately rejected. This would not amount to an intention to claim wrong relief and attract imposition of penalty. The appeal to the extent of imposition of penalty and interest is also liable to be allowed. Thus, the amount received from the sale of old cars cannot be included in the taxable income of the assessee. It is further held that the appellant-assessee is not liable to be penalized on claiming ITC on item Nos. 41 to 59 - appeal allowed.
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